Tag Archives: Colombia

Breakthrough in the Use of Artificial Intelligence to Fight Corruption

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Whatever peril or promise the future of artificial intelligence holds, Brazilian, Colombian, and Italian researchers show it is a powerful tool for targeting corruption investigations.

Each year Colombia and Italy let thousands of contracts for goods, services, and public works, and each year some percentage is awarded thanks to bribery, conflict of interest, or other corrupt behavior. Each year Brazil’s central government transfers millions of dollars to the countries’ 5,500 plus municipal governments, and each year employees of some governments steal a portion.

Corruption is discovered through audits or whistleblowing, but a significant percentage goes undetected. The work done in Brazil, Colombia, and Italy shows how AI helps governments to deploy their investigative resources to boost the odds of finding a much larger percentage.

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A “Necessary Evil?” The Migrant Crisis and Corruption in the Darien Gap

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The Darien Gap—the rugged, marshy isthmus straddling the rainforests of Colombia and Panama—has become a bottleneck in the flow of migrants from South America to the United States. In recent years, migrants have begun pouring across the previously impassible narrow crossing. Though human rights advocates have lamented the tremendous suffering that this dangerous path entails for migrants, relatively little attention has been paid to the reasons underlying Darien Gap’s “opening.” The nearly 400,000 migrants who have traveled from South America to the US-Mexico border this year alone would not have been able to cross the Darien Gap save for the egregious corruption of local Colombian authorities. Corruption has enabled people to escape the abuses of repressive regimes in Venezuela and elsewhere. Yet in so doing, it has created its own humanitarian disaster by facilitating a journey full of death and despair.

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Corruption and Trade Misinvoicing: A Closer Look at Colombia

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Trade misinvoicing—the misrepresentation of the price, quantity, origin, or quality of traded goods—is a serious problem. Misinvoicing deprives the government of revenue by enabling importers and exporters to evade taxes and duties, or to claim undeserved tax incentives. Consider the case of Colombia: According to estimates, in 2016 the country lost approximately US$2.8 billion in revenue due to trade misinvoicing (equivalent to roughly 5.2% of total Colombian tax revenues collected that year)—revenues that could have paid for Colombia’s 2018-2022 National Development Plan more than eight times over. Trade misinvoicing also plays a key role in so-called trade-based money laundering (TBML), as the under- or over-statement of value of traded goods is one way to move value across borders and disguise the origin of illicit wealth. This form of money laundering is especially attractive to criminals, in part because roughly 80% of global trade transactions do not involve bank financing and as a result are not subject to the anti-money laundering (AML) controls that apply to the financial sector. Myriad TBML cases can be found in countries where corruption is systemic and impunity reigns (see here, here, and here).

Corruption of customs officials is the lubricant that makes trade misinvoicing possible. As one illustrative example of the extent and impact of such corruption, consider the case of Humberto Angulo Montero, the former head of the Cartagena Office of Colombia’s National Directorate of Taxes and Customs (Dirección de Impuestos y Aduanas Nacionales, or DIAN). In 2015, following a nine-year investigation, Angulo was arrested for taking kickbacks from smuggling networks importing alcohol, cigarettes, textiles, and shoes. The investigation revealed that Angulo facilitated the under-reporting of goods by up to 50%, allowing the importers to make colossal profits. In return, the importers gave Angulo a share of those profits—a hefty enough share that his personal wealth increased an astounding 580% between 2003 and 2009. Angulo’s case may be extreme, but it is hardly unique.

Governments in countries like Colombia can and should do more to prevent this sort of corruption. While Colombia took an important step forward in 2015 by passing its Customs Law No. 1762, there is still much room for improvement. Here are four recommendations for making progress on this issue, which are tailored to Colombia but that may apply more broadly:

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Corruption Should Be a Laughing Matter

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Corruption is a serious matter—it sucks away public finances, undermines good governance, ends livelihoods, and consumes lives. It’s therefore understandable that many anticorruption activists center much of their work on getting people to take corruption seriously. But despite the underlying gravity of the problem, sometimes a surprisingly effective way to fight against corruption is to make people laugh about it.

Consider Alexei Navalny, the Russian activist whose attempted assassination, arrest, and imprisonment underscore just how much Moscow has recognized his power. One of the striking things about the explosive videos that Navalny has released to expose the Putin regime’s corruption is that the videos aren’t just shocking—they’re funny. People enjoy watching them because of their biting humor—and while they’re laughing, they also learn about Putin’s siphoning of public funds for his own benefit.

There are plenty of other examples of anticorruption activists effectively using humor as part of their campaigns. To mention just a few:

  • Last summer, Lebanese activists staged a fake—and deliberately comical—“funeral” for the Lebanese currency (the lira), as a protest against the cronyism and mismanagement that “killed” the Lebanese lira and tanked the country’s economy. A video of the “funeral” gathered over 10,600 views on Twitter and brought renewed international attention to an anticorruption protest movement that at that point was approaching its seventh month without much success.
  • A Chinese artist known as Badiucao has used satirical art to bring attention to the ruling party’s political corruption, including a famous “promotional poster” for the TV series House of Cards, with Xi Jinping sitting on the throne instead of series villain Frank Underwood. His art helped spark renewed criticism of the regime and is credited with inspiring political cartoons throughout Hong Kong’s democratic uprising against China’s controversial 2019 extradition bill.
  • In Ukraine, Volodymyr Zelensky was elevated from comedian to President of Ukraine by campaigning on an anticorruption platform. Comedy was a key part of his 2018 campaign—instead of traditional rallies, he held performances by comedy troupes skewering the corruption of the incumbent regime.
  • Back in 2004, the then-mayor of Bogota Antanas Mockus pushed back against the city’s petty corruption through antics like inducting 150 “honest” taxi drivers into a fictional club called the “Knights of the Zebra.”

These and other examples illustrate an important lesson for anticorruption activists: Notwithstanding the seriousness of corruption and the harm that it causes, humor can be a powerful tool in spreading an anticorruption message. As a rhetorical device, humor has a few distinctive strengths:

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New Podcast, Featuring Andres Hernandez

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A new episode of KickBack: The Global Anticorruption Podcast is now available. This episode features an interview with Andrés Hernández, the executive director of Transparencia por Colombia (the Colombian chapter of Transparency International). During the interview, Mr. Hernandez covers a range of topics including corruption in the Colombian judicial system, problems in the system for appointing senior public officials, the background and consequences of Colombia’s recent popular referendum of a slate of anticorruption measures, and how corruption may be a factor in recent popular street protests throughout the country. In the later part of the interview, Mr. Hernandez and I also discuss the proposal for the creation of an International Anti-Corruption Court, which the Colombian government has endorsed. The interview concludes with some broader reflections on how the corruption challenges have changed over the past two decades, and why there might be some reasons for cautious optimism about the potential for significant progress going forward.

You can find this episode, along with links to previous podcast episodes, at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

New Podcast Episode, Featuring Cristina Bicchieri

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, Nils Köbis interviews University of Pennsylvania Professor Cristina Bicchieri about her interdisciplinary work on corruption and anticorruption, which addresses a range of questions including why corruption can be so “sticky,” the role of social norms in shaping corrupt or non-corrupt behavior, how and why perceptions and attitudes toward corruption may differ between men and women, and what the implications of social norm theory are for effective anticorruption strategy.

You can find this episode, along with links to previous podcast episodes, at the following locations:

KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Preserving Electoral Integrity Without Disenfranchising the Poor: Suggestions for Improving a Voter Residence Verification System in Colombia

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Vote-buying—a particularly corrosive form of political corruption—is present in many jurisdictions, especially in the Global South. And not only is vote-buying itself a form of corruption, but the practice exacerbates other forms of corruption, because politicians need to raise enough money to buy enough votes to beat their opponents (who are also engaged in vote-buying), and in order to raise enough money, politicians often enter into deals with private parties who (illegally) “lend” the politician the money he or she needs to buy enough votes to win the election, and then, once in office, the politician pays back the private parties—either directly, with embezzled funds, or with inflated government contracts (see, for example, here and here).

But sometimes a candidate might worry that she won’t be able to buy enough votes from voters who actually live in the district where the candidate is running. This is especially true when competing candidates are trying to buy votes. In a competitive district, a relatively small number of votes can swing the election, so politicians have an incentive to scrounge for extra votes. This, understandably, also drives up the “price” for votes in the district. In Colombia, one way that politicians have developed to increase the pool of voters they can “buy,” and hence keep the price down, is to pay voters to illegally register in a district other than the district where they actually live. (In Colombia, as in many countries, adult citizens may only register to vote in the district where they actually reside.) So, the politician pays these voters twice—first to illegally register in another district, and then to vote in that district for the politician—and on both registration day and election day the politician will arrange for the transportation of these non-resident voters to the district where the politician is running. This practice, known as electoral transhumance, is illegal, yet there have long been concerns that it is pervasive in many parts of the country.

In October 2015, Colombia introduced a new tool to fight this sort of electoral fraud. Using so-called “big data analytics,” the authorities were able to cross-reference the National Electoral Registry databases with the System for the Identification of Potential Beneficiaries of Social Programs (known as SISBEN), and as a result of these checks, nearly 1.6 million voter registrations to vote were declared void—a large number in a country with 33 million registered voters. That seems like a big win, and a nice example of how new technologies can help crack down on pervasive corruption (here, electoral corruption). But a closer look reveals that the picture is not as rosy as it first appears: Despite its good intentions, and some positive results, this purge of the voter rolls ended up disproportionately disenfranchising low-income voters. Continue reading →

Even “Tough on Corruption” Proponents Should Worry about “Zero Tolerance” Rules

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“Zero tolerance for corruption,” as Professor Stephenson suggested in a 2014 post, is an expression that can be construed in several different ways: from a general attitude that corruption should be considered “a high priority,” to an uncompromising policy mandating that “all feasible measures to minimize corruption must always be used.” In this post I will discuss another common, narrower understanding of “zero tolerance for corruption,” according to which corruption – at least in certain contexts – must always be addressed with a mandatory predetermined harsh sanction. A clear example of such a “zero tolerance” rule is the Colombian and Peruvian law demanding the instant termination of “any public contract tainted by corruption.” Another illustrative example is the EU’s directive mandating debarment from public contracting of any company convicted of offenses of corruption, fraud, or money laundering.

Granted, the potential deterrent value of mandatory harsh sanctions for corruption is substantial. A company aware that any conviction for corruption will inevitably incur severe penalties is more likely to be dissuaded from violating the law. Nevertheless, the costs of this “take no prisoners” approach to anticorruption may be much higher than the actual benefit. Thus, as Rick Messick recently showed, the law mandating termination of corruption-tainted public contracts has proven to have disastrous ramifications for the infrastructure in Peru and Colombia. As it turns out, not only has the nondiscretionary cancellation of corruption-tainted public contracts halted the advancement of existing infrastructure projects, but it has also deterred investors and developers from taking any part in such projects, for fear that they will be cancelled due to “the tiniest of infractions by anyone associated with the project.” Similarly, debarment is nothing less than “a death-sentence” for companies whose main business involves public contracts, and its mandatory imposition for even a relatively minor offense may be so draconian as to be counterproductive.

This kind of cost-benefit reasoning, though compelling to some, would not convince many proponents of an unequivocally “tough on corruption” stance. Many anticorruption hardliners believe in maximizing deterrence notwithstanding any associated costs. From this point of view, the end of deterring corruption justifies all necessary means. Yet even for those who take this view, it turns out that “zero tolerance” may not be the ideal approach. Supporters of “zero tolerance” rules assume that adoption of mandatory sanctions for corruption would guarantee that actors in the anticorruption system – judges, prosecutors, and legislators – will adhere to the “zero tolerance” ideal, and that such rules would be sustainable. But these decisionmakers in the anticorruption system may evade the application of “zero tolerance” rules where doing so would lead to sanctions perceived (rightly or wrongly) as patently absurd or unjust. In other words, a “zero tolerance” rule on the books does not guarantee that a “zero tolerance” policy would actually be implemented. Consider the various ways that actors in the anticorruption system may avoid triggering the mandatory sanctions for corruption:

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Colombia’s Harsh Criminal Penalties for Corruption Are an Illusion. Here’s How To Fix That.

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Whenever a new corruption scandal comes to light, many politicians instinctively react with strong punitive rhetoric, and this rhetoric often translates into action, usually in the form of amendments to criminal codes that make penalties for corruption offenses harsher. Latin America supplies plenty of examples of this (see here, here, here, and here.) Yet despite this emphasis on punishment, many corrupt politicians avoid justice altogether, and in the rare cases where they are found guilty, many end up doing only short stints in comfortable detention centers. Consider, for example, Colombia, which has unusually good public data on corruption convictions and sentences thanks to the work by the Anticorruption Observatory of the Secretary for Transparency. According to this data, between 2008 and 2017, criminal courts in Colombia have convicted 2,178 individual defendants for corruption (51.2% for bribery, 23% for embezzlement, and the remainder for other corruption-related offenses), but only about one-quarter of these convicted defendants actually went to prison. Approximately half of these defendants received suspended sentences, while another quarter were sentenced to house arrest. And of those who did go to prison, the time served was only about 22 months on average, much lower than the penalties on the books for corruption offenses. No wonder many Colombians believe the criminal justice system is too lenient.

The reason that actual Colombian sentences end up being so light, despite the penalties on the books being so heavy, is that Colombian law includes a set of provisions that allow for a variety of sentence reductions if certain conditions are met. For example, a defendant who accepts guilt can receive a 50% reduction in his prison term. Inmates may also reduce their prison term through work, with very generous terms: An inmate reduces his sentence by one day for every two days of ordinary work (8 hours of work per day), or for every four hours of work as a teacher. An inmate can also reduce his sentence through in-prison education, with  six hours of study translating into one day of sentence reduction. Furthermore, once an inmate has served 60% of his sentence, he can petition for release for good behavior. 

This excessive leniency needs to be addressed, not only in corruption cases but in all cases. Specifically, Colombia should adopt the following revisions to its criminal laws: Continue reading →

Video: CAPI Panel on “Anti-Corruption Efforts in Latin America”

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Recent developments in the fight against corruption across Latin America seem to have prompted an increasing number of conferences, workshops, and similar events that focus on this issue. (I was able to participate in one such event at Rice University’s Baker Center a few months back.) Last month, Columbia University’s Center for the Advancement of Public Integrity (CAPI) held another, similar event that may be of interest to those who follow these developments (indeed, perhaps of even greater interest to those who haven’t been following them, but would like to get up to speed). The panel, entitled “Anti-Corruption Efforts in Latin America: Perspectives from Brazil, Argentina, Colombia, and Mexico,” was moderated by Daniel Alonso (Managing Director of Exiger), and featured four senior lawyers from the region: Eloy Rizzo Neto (Brazil), Gustavo Morales Oliver (Argentina), Diego Sierra (Mexico), and Daniel Rodriguez (Colombia). The video of the discussion can be found here. And here’s a quick overview of the discussion, with corresponding time markers for the video: Continue reading →